Moody's may upgrade Diamond Offshore

Moody's Investors Service said it placed Diamond Offshore Drilling, Inc.'s Baa2 senior unsecured notes on review for possible upgrade following the recent conversion of $440 million of debt into equity, which reduced Diamond's outstanding debt at Dec. 31 by 46% to $524 million.

The agency said the review is further supported by Diamond's contract drilling backlog of $7.4 billion, which provides high visibility to the company's earnings and cash flows through at least 2008, and by Loews Corp.'s controlling ownership interest, which mitigates the event risk concerns that hang over the offshore drilling sector.

The review will focus on Diamond's financial policies with regards to future levels of debt, special dividends and liquidity and on management's strategies regarding the growth of its drilling fleet and expectations of capital expenditures to maintain and upgrade its current fleet. Moody's said it expects the review will be completed shortly after the release of the company's first-quarter results and will likely result in a one-notch upgrade of the current ratings.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.